Just price facts for kids
The just price is an old idea about fairness in buying and selling. It comes from ancient Greek thinkers and was later developed by a famous teacher named Thomas Aquinas. He believed that prices should be fair and not take advantage of people. This idea was especially against charging too much interest on loans, which was called usury back then.
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Unfair Prices: A Kind of Cheating
Thomas Aquinas thought it was wrong to charge interest on loans because he felt the lender was getting money for nothing. He also believed that if you exchange money, it should be a fair trade. One dollar should be exchanged for one dollar's worth of value.
Aquinas later said that any unfair earnings in trade were wrong. He based this on the "Golden Rule": "Do unto others as you would have them do unto you." This means you should trade fairly, giving good value for what you receive.
He thought it was especially bad to raise prices just because someone really needed something. For example, if a buyer was in a difficult situation and would pay more, Aquinas said it was wrong to charge them extra. He wrote:
- If someone would be greatly helped by something belonging to someone else, and the seller not similarly harmed by losing it, the seller must not sell for a higher price: because the usefulness that goes to the buyer comes not from the seller, but from the buyer's needy condition: no one ought to sell something that doesn't belong to him.
- — Summa Theologiae, 2-2, q. 77, art. 1
This means Aquinas would say it's wrong to raise the price of wood or tools after a natural disaster like a hurricane. Even though many people suddenly need building supplies, the seller's costs haven't gone up. Taking advantage of people's urgent need was seen as a type of fraud (cheating) by Aquinas.
Aquinas believed that any money a merchant made should come from their own hard work, not from how much a buyer needed something. He agreed that merchants could make a fair profit to support their families or help others. But the price had to be reasonable and controlled.
How the Idea Changed Over Time
When Aquinas lived, most goods were sold directly by the people who made them, like farmers or craftspeople. There weren't many big businesses or banks yet.
Later, a group of thinkers called the School of Salamanca said that a fair price could be the same as the market price. This depended on things like how much sellers and buyers could bargain. Sometimes, public officials would even set prices.
As Capitalism grew, the idea of a "just price" became less common. It was mostly replaced by the economic idea of supply and demand. Thinkers like John Locke and Adam Smith helped develop this idea. In modern economics, getting interest on a loan is seen as payment for letting someone use your money. However, most banking rules still stop banks from charging extremely high interest rates.
The idea of a just price was also used by people to protest against merchants who raised prices a lot during times when food was scarce. Historians have shown how this idea led to protests by peasants in Europe and in many developing countries. It was a way for people to resist unfair authority.
Laesio Enormis: Unfair Harm in Contracts
Even though ancient Roman law said people could try to get the best deal in a trade, a new idea developed. This idea was called laesio enormis, which means "abnormal harm." It meant that if a contract was very unfair to one person, courts might not make them follow it. They could even reverse the deal if one person gained too much unfairly.
Over time, many countries didn't fully adopt this rule. They preferred the idea of "freedom of contract," where people could agree to almost anything. However, in modern times, laws have been made to protect consumers, renters, and workers. These laws make sure that contracts are fair. Some terms in contracts are now required, and others are seen as unfair. Courts can step in to make sure things are just for everyone involved.
Modern Laws About Fairness
Many modern laws and court decisions reflect the idea of fairness in contracts. For example:
- In Germany, court decisions have dealt with unfair prices for goods or loans.
- The Bürgerliches Gesetzbuch (German Civil Code) has rules against transactions that are against public policy or involve usury (excessive interest).
- The Austrian Civil Code and French Civil Code also have articles about fairness in agreements.
- In English law, cases like Vernon v Bethell (1762) discussed unfair deals.
- Laws like the Consumer Credit Act 1974 in the UK help protect people from unfair credit agreements.
- The National Minimum Wage Act 1998 ensures workers get a fair minimum payment.
- The Louisiana Civil Code also has rules about fair prices in sales.
See also
In Spanish: Precio justo para niños
- Catholic social teaching
- History of economic thought
- Labor theory of value
- Price
- Pricing
- Supply and demand
